December 12, 2023

Senator Elizabeth Warren's Anti-Crypto Legislation Gains Ground in U.S. Senate

The Digital Asset Anti-Money Laundering Act, championed by Senator Elizabeth Warren, has recently garnered backing from five additional senators.

Senator Elizabeth Warren's legislative effort to clamp down on illicit activities involving cryptocurrencies is gaining momentum within the Senate.

The Digital Asset Anti-Money Laundering Act has now received support from five new senators, with three of them serving on the Senate Banking Committee.

Expressing her satisfaction, Warren stated in a press release:

"I’m glad that five new senators are joining the fight to take action, including three members of the Banking Committee – our bipartisan bill is the toughest proposal on the table cracking down on crypto’s illicit use and giving regulators more tools in their toolbox"

The bipartisan bill has earned endorsements from various organizations, such as the Bank Policy Institute, Massachusetts Bankers Association, Transparency International US, and Global Financial Integrity.

The primary objective of the bill is to combat the use of cryptocurrencies in money laundering, drug trafficking, and sanctions evasion by enhancing regulatory oversight in the industry. However, proponents of cryptocurrencies argue that the proposed measures not only address illegal activities but also undermine the entire crypto ecosystem and the basic principles of freedom.

Outlawing crypto

One notable aspect of the bill is the extension of Know-Your-Customer requirements, as outlined in the Bank Secrecy Act, to digital asset wallet providers. This includes non-custodial wallets, miners, validators, and other network participants engaged in digital asset transactions.

Alex Thorn, head of research at asset management firm Galaxy Digital, raised concerns, stating:

"As non-custodial and decentralized software cannot plausibly perform centralized compliance functions, warren’s bill would effectively outlaw crypto in America."

Additionally, the legislation suggests extending Bank Secrecy Act rules for foreign bank accounts to cover digital assets. It outlines that the Financial Crimes Enforcement Network (FinCEN) would ensure that owners and administrators of digital asset ATMs submit and regularly update the physical addresses of their kiosks, while also verifying customer and counterparty identities.

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